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Building an effective organization

How do you respond to the challenges facing business globally?

The economic downturn has


caught many off-guard. But in
these times of change lessons
can be learned from the past
as business leaders look to the
future. Just how do you build
an effective organization fit
to face the challenges of the
global landscape?
This booklet looks at how Hay Group
helps clients build an effective
organization during times of change
through a series of short case studies.

Contents:
Market change demands new ways of operating

Opening up public sector markets

Keeping your margins healthy

Engaging with a shifting marketplace

Focusing on your clients

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M&A synergies dealing with the intangibles

12

Creating public sector efficiencies

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Going global

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Hay Group played a pivotal role


in executing our strategic business
plan into reality. You really did make
a difference to what we needed
to do and provided the challenge
to us when needed. The final event
certainly left us with a tremendous
platform from which to build to
make AZRA fit for the future.

Graham Higson | Vice president and global head of regulatory affairs

Market change demands


new ways of operating
Seizing new growth opportunities and maintaining
market position.
Astra Zeneca | UK, Sweden, USA
The pharmaceutical industry is characterized by rapid and profound change.
Organizations in that sector are finding that speed and cost to market is more
important than ever and are responding by bolstering their pipelines with
new products.
In response to an environment that is undergoing seismic changes, Graham
Higson, vice-president and global head of regulatory affairs (AZRA), worked
with his leadership team to create a strategic business plan that had the
potential to transform AZRA.
Hay Group helped AZRA to convert that plan into a tangible and practical
reality that both leadership and employees clearly understood. We helped
them create a new organization that matched their strategy. This involved
the design of an organizational structure to match future requirements,
developing new behaviors as well as identifying processes to support new
ways of working. A communications plan was designed and implemented
to share these changes with employees in order to help them understand
the importance of their work within the big picture so that day-to-day
support could continue without unnecessary disruption.

Opening up public sector markets


How do companies compete and grow in a newly
liberalized marketplace?
Samir oil refinery | Morocco
Samir was the first oil refinery business to be established in Morocco. Its
privatization in 1997 revealed all the troubles the company was suffering from:
a cumbersome hierarchy, lack of clarity and an obsolete corporate structure.
This prevented the company from adapting to its newly privatized role as old
ways of working, established whilst the company was owned by the state,
prevented it from modernizing and becoming more competitive.
Hay Group identified three ways in which Samir could respond effectively to
the challenges presented by liberalization, reducing people costs, redesigning
the organization and reallocating resources.
The benefits of the structural overhaul were felt immediately. Samirs market
capitalization increased by four times in the course of the year following the
implementation of Hay Groups recommendations.



With a company moving from a closed


market to an open market, we were able
to analyse the company structure from
the top floor and successfully put in
place new governance models to allow
it to adjust to its new challenges.
Claude Dion | Hay Group




Hay Group helped us identify how we


could work in new ways to achieve our
strategic goals. Within this framework,
finding cost savings was much more
achievable. By the end of the process,
senior managers started to own the drive
to identify capacity for efficiencies and
pushed it to a much greater extent
than we anticipated would be possible.
Siobhan Toale | People director strategic transformation, Bank of Ireland

Keeping your margins healthy


Reducing cost and boosting growth.
Bank of Ireland | Ireland
Brian Goggin, group chief executive of Bank of Ireland unveiled his strategy in
March 2005: he wanted to create a company fit for future growth, with a targeted
120 million of sustainable savings by 2007.
Hay Group worked with each head of function within the group, analyzing their
operations, activities and processes to identify which were central to strategic
success. We also highlighted operational overlaps and gaps. This produced a
clear picture of opportunities for efficiency improvements.
Part of our solution to help the Bank of Ireland restructure and prepare for growth
involved reducing headcount by 37 per cent. Although a tough decision to
make in the short-term it was necessary for the long-term growth prospects of
the company and doubled the initial financial savings that had been projected.

Engaging with a shifting marketplace


Deregulation can present opportunities if your
organization is agile enough to tap into them.
Government Employees Superannuation Board ( GESB ) | Australia
GESB is the largest Western Australian superannuation fund. Changes to
the Commonwealth Superannuation Act created an open, more competitive
market for the management of superannuation investment. This significant
change brought both opportunities and challenges for GESB.
Hay Group worked with GESB on every facet of the transformation journey.
Our consultants facilitated a series of workshops with GESBs senior
management to identify what they saw as constituting future success.
Based on the results of these workshops, a new operating model was
developed and the roles, responsibilities and leadership behaviors needed
to make this model work agreed.

From a situation where we had a guaranteed


pool of funds and a predictable turnover, we
could now diversify and grow into new areas.
But to capitalize on that opportunity; we would
have to move from an administrative business
model focused on processing to a customerfocused organization with clear distribution
channels. Instead of developing products
to fit only the state government, we now had
to think about what we could offer profitably
to others, while maintaining a good
relationship with customers.
Michelle
Dolin | CEO for GESB




When we first started working with ZIM,


the attitude was typically, if our ships
are good enough, customers will come.
But CEO Doron Goder knew that this
approach was not sustainable if they
were to meet such challenging growth
targets.

Israel Berman | Hay Group

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Focusing on your clients


Keeping the focus on the client can require changes
in behaviors and perceptions; an external perspective
can be critical in driving that message home.
ZIM (Integrated Shipping Services) | Israel
Following privatization, Zim Integrated Shipping Services set itself stretching
growth targets. However, in order to reach its vision by 2010, CEO Doron Goder
realized that they needed help in rethinking their structure and operations.
The company was not focused on the market: clients dealt with agents who
were not tied to their business. Furthermore, everything was run from Zims
headquarters in Israel, so the regional presence was minimal. As a result, ZIM
had limited understanding of local markets.
Hay Group worked closely with the CEO and the top team to install new
processes through the creation of a Corporate Change Program. One result
of this initiative was the development of a new organizational structure,
creating four geographic business units at the core of the companys operations:
Israel and Russia, Europe and Africa, the Americas and the Far East a change
which reflected market realities.

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M&A synergies
dealing with the intangibles
With any acquisition, executives leading the deal often
face competing priorities and are often under pressure
to deliver shareholder return ASAP. Getting the
balance right between the tangibles and intangibles
of an acquisition is key to success.
CGG Veritas | France
Having spent $3.5 billion to acquire Veritas, a major competitor in the seismic
survey industry, Robert Brunck, CEO and chairman of CGG, knew he had to act
fast to deliver on the promises he had made to clients, investors and employees.
The goals for the merger were clear: secure client relationships, position
CGGVeritas in the industry and deliver over $1 billion in new revenue by
increasing margins and selling more services. To achieve these goals, eight
thousand employees worldwide would have to be able to navigate around
a new operating model and organizational structure.
Hay Group became Bruncks integration architect, managing post-merger
activity across a broad range of issues. A business-focused integration strategy
was created which balanced the delivery of the tangibles operational
aspects of running a business with the more intangible elements of corporate
life, such as the organizational, relational and human capital.

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We moved quickly in the first year. With


Hay Groups help we proactively identified
the risks to our intangibles early in the deal.
This has made the difference to our overall
success and is the reason why we have
been able to deliver tangible value to our
shareholders in less than 18 months
of combined operations.

Robert Brunck | CEO and chairman, CGGVeritas

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For a traditional government body there


had been very few changes for decades,
the changes required to make the Building
Authority of Upper Austria a more effective
organization were radical. What made it work
was the inclusion of people from all walks of
life they helped shape the new organization
as much as top management.
Bibi
Hahn | Hay Group


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Creating public sector efficiencies


Just as private sector companies constantly look at
ways of improving their profit margins, there is a
growing trend in the public sector for organizations
to increase efficiency and do a better job for citizens.
Building Authority of Upper Austria (Public sector) | Austria
Leadership changes at the Building Authority of Upper Austria kick-started
a fresh look at how this government department functioned and provided
services to the general public.
The building authority was responsible for the planning, construction and
maintenance of streets, bridges and tunnels in Upper Austria. It was challenged
by the publics call for greater efficiency and economy, while striving to do
a better job serving citizens. Old, long established ways of working were
hindering how the organization functioned across its different departments.
The building authority faced several hurdles owing to the current working
environment. Few employees understood the companys current vision never
mind the new one, strategic objectives or how their jobs contributed to the
organizations success. Therefore, to introduce something completely new
in a rather traditional environment could mean significant internal resistance.
Gaining commitment to any change would be key to its success.
Hay Group worked with the top team at the building authority to define their
strategic vision and develop a new business strategy to support this vision.
This resulted in developing a comprehensive and integrated business model.
At every step of the journey, strategic planning was translated into the
day-to-day business agenda. Employees views were actively sought to test out
proposed new plans and ensure that they were included in building their new
organization rather than there being just a top down directive. This approach
helped to ensure the success of the changes to modernize the Building
Authority of Upper Austria and provide a better service to the general public.
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Going global
Expanding internationally and switching focus from
production processes to a more outward looking
emphasis on markets and customers requires clear
direction from the top and commitment at all levels
of the organization.
Strauss Group | Israel
Strauss, a family-owned food and drink company based in Israel, acquired
another Israeli food company, Elite, with plans to expand internationally.
The family wanted Strauss-Elite to become a profitable customer-focused
company with a shared culture and vision grounded in its family-run spirit
a challenge when bringing together two businesses with two distinct histories.
Hay Group started to work with Strauss Group at the start of the integration and
studied the two companies separately, examining their cultural similarities and
differences and their readiness for change. Working with the chairperson and
the senior management team, a blueprint was developed that set out what the
organization should become and how the changes would be achieved over time.
Work included leadership development, launching new processes, and new
ways of business and performance management. Hay Group continues to
support Strauss-Elite which has now rebranded itself as the Strauss Group.

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After implementing the changes


suggested to us by Hay Group,
Strauss Group has managed
to deliver outstanding results
in terms of double-digit growth
each year and improved
profitability at even higher rates.
Erez Vigodman | Chief executive officer, Strauss Group

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Africa
Cape Town
Johannesburg
Pretoria
Asia
Bangkok
Beijing
Hong Kong
Jakarta
Kuala Lumpur
Mumbai
New Delhi
Seoul
Shanghai
Shenzhen
Singapore
Tokyo
Europe
Athens
Barcelona
Berlin
Bilbao
Birmingham
Bratislava
Bristol
Brussels
Bucharest
Budapest
Dublin
Frankfurt
Glasgow

Helsinki
Istanbul
Kiev
Lille
Lisbon
London
Madrid
Manchester
Milan
Moscow
Oslo
Paris
Prague
Rome
Stockholm
Strasbourg
Vienna
Vilnius
Warsaw
Zeist
Zurich

Edmonton
Halifax
Kansas City
Los Angeles
Mexico City
Montreal
New York Metro
Ottawa
Philadelphia
Regina
San Francisco
San Jos (CR)
Toronto
Vancouver
Washington DC
Metro

Middle East
Dubai
Tel Aviv

Pacific
Auckland
Brisbane
Canberra
Melbourne
Perth
Sydney
Wellington

North America
Atlanta
Boston
Calgary
Charlotte
Chicago
Dallas

South America
Bogota
Buenos Aires
Caracas
Lima
Santiago
Sao Paulo

Hay Group is a global management consulting firm that works


with leaders to transform strategy into reality and to help
people and organizations realize their potential.
We have over 2600 employees working in 85 offices in
47 countries. For more information please contact your
local office through www.haygroup.com.
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